Question: Please illustrate the following process using a T-account. 1) Situation A: Let's say that Jane Brown has heard that the First National Bank provides excellent

Please illustrate the following process using a T-account.

1) Situation A: Let's say that Jane Brown has heard that the First National Bank provides excellent service, so she opens a checking account with a $200 bill. Please show its T-account.

2) Situation B1: As you know, the bank is obliged to keep a certain fraction of its checkable deposits as required reserves. If the fraction (the required reserve ratio) is 10% and the excess reserves the bank holds is $180. Please rewrite its T-account.

3) Situation B2: Suppose the banks wants to hold the $180 as Loans (not excess reserves). Please rewrite its T-account.

4) Which one is more profitable, Situation B1 or Situation B2, why?

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